The Korean health ministry yesterday said it was scrapping a controversial childcare programme that provided free day care for all children aged 2 or under.

Instead, families belonging to the bottom 70 per cent of income bracket will receive cash subsidies of between 100,000 won (US$89.40) to 200,000 won a month per child, it said.

“I apologise for all the confusion that might be caused by the proposed change in policy,” Minister Lim Chae-min told reporters during a press briefing.

“I beg your understanding that it was an inevitable move in order to put the nation’s childcare policy on the right track in the long term.”

The current programme, which was pushed by politicians bent on welfare expansion ahead of key elections, has turned into a major fiscal headache for central and local governments, just seven months after its implementation.

It was also criticised as being critically flawed, as more working moms started to complain of the difficulty in finding vacancy in day care centres. The programme prompted stay-at-home moms to send their kids to centres so as to not waste free benefits they are entitled to, experts said.

Under a new plan, which the ministry hopes to implement in March 2013, the government will give monthly childcare subsidies in cash to families in the bottom 70 per cent of the income bracket.

The scale is 200,000 won for infants less than 1 year old; 150,000 won for those aged between 1-2 years old and 100,000 won for two-year-olds.

Vouchers will be provided for families who send their children to day care centres, but the amount will differ depending on whether or not parents both work. If both parents work, the voucher to be provided will cover a full-day service, but if just one works, it will cover only half a day.

The ministry’s plan to overhaul the free childcare policy is expected to generate a new round of welfare debate in Korea, as the country seeks ways to greatly improve the social safety net amid a growing income gap. Presidential candidates from both liberal and conservatives sides are all building their platform around welfare expansion.